Order Contracts in the United Kingdom. The Implicit Transfer of Rights are Sometimes also Recognized

We continue our analysis of the questions of copyright ownership with the order contract, here relying exclusively on British law which is, according to us, much richer than the American law (as for the latter, we can note that according to article 101 of the Copyright Act, the work of order is considered to be a component of works made for hire on the condition that, first, the work is listed as one of the nine type of works recognized as copyrightable in paragraph 2, and, second, to have been attached to this category by a specific contract).

Under the influence of the law of 1988 (CDPA), the position of the British law is clear. Copyright on a work of order belongs to the author of the work to whom it is ordered. Here, we find the same logic as the one used in French law[1]. However, the British judge leaves the door open to situations of implicit transfer of copyright as shown by the decision Griggs Group v. Raben Footwear[2] ruled in 2004 and which, it can be underlined, is not at all an isolated decision.

The Griggs company distributes the famous Dr Martens shoes. For the realization of a logo, it calls in an advertising agency which calls in a designer (Mr. Evans) who is a freelancer paid fifteen pounds an hour. No order contract was concluded. On the other hand, an invoice is established between the advertising agency and the designer in which, apparently, were listed a number of points of sale in England in which the shoes were to be sold with this logo. The designer who thought most likely to be the copyright owner, transfers his copyright to a competitor of Griggs in Australia (Rabben Footwear). Griggs, who believed to have been transferred the copyright, assigned in forgery Rabben Footwear. For the judges (the High Court, as well as the Court of Appeal), Mr. Evans was indeed the first owner of the copyright. Nevertheless the copyright had been implicitly transferred to Griggs. To reach this conclusion, the judges are going to consider that such a solution is the only one that can give a full commercial efficiency to the order contract as it was obvious that Griggs had ordered a logo to be able to use it. It thus had the legitimacy to forbid third parties from using its creation. For the needs for their reasoning, the judges call on the test of the officious bystander which as been used in 1926 by MacKinnon LJ in the case Southern Foundries Ltd v Shirlaw. The idea of this test (which extends widely beyond the subject of intellectual property) is to fictitiously appeal to a knowledgeable observer in order to question him/her about the necessity of introducing a particular article in a contract or if such article can be considered as implicit. This ideal person, who nobody has ever met in reality, evokes all the standards to which the judge calls on in general (this ideal person used to be referred to as “good father” in the French Civil code) and in particular in intellectual property law (“the professional”, for example, in patent law or “the warned observer ” in designs law). In the Griggs decision, judge Jacob LJ observes that: “in this case, if an officious bystander had asked at the time of contract whether Evans was going to retain rights in the combined logo which could be used against Griggs, or against anyone to whom he sold the rights, anywhere in the world, other than in respect of point of sale material in the UK, the answer would surely have been “of course not“”. We have understood that, for the warned observer of the contract concluded between Griggs and Mr. Evans, it is obvious that the copyright could not be have been held by the designer and given up to a third party against the interests of Griggs (even if in good logic, it has been necessary to admit two implicit transfers: between Griggs and the advertising agency and between the advertising agency and Mr. Evans).

This test, which introduces flexibility in the contract’s interpretation, is generally criticized by the practitioners and the doctrine for the legal insecurity that it creates. It seems to us, on the contrary, very useful and in every respect similar to the analysis followed by the judges in France on the foundation of the former article 1135 of the Civil code[3] (today article 1194 of the Civil code) which states that: “Agreements bind not only as to what is therein expressed, but also as to all the consequences that equity, usage, or law impose upon the obligation according to its nature.”

[1] Selon l’article L. 111-1 al. 3 du Code de la propriété intellectuelle : « L'existence ou la conclusion d'un contrat de louage d'ouvrage ou de service par l'auteur d'une œuvre de l'esprit n'emporte pas dérogation à la jouissance du droit reconnu par le premier alinéa ».

[2] Griggs Group v. Raben Footwear FSR (31) 673 2004

[3] Pour un exemple célèbre en matière de droit d’auteur CA Paris 17 janv. 2007 Propr. intell.2007, no 23, p. 216, obs. Lucas.

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